Exercise 22-15 (Algo) Manufacturing: Direct materials, direct labor, and overhead budgets LO P1 MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $11,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's direct materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget September October November Units to produce 4,600 6,500 6,200 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October. MCO Leather Direct Materials Budget Units to produce Materials needed for production (pounds) Total materials required (pounds) September October Materials to purchase (pounds) Cost of direct materials purchases < Required 1 0 0 0 0 0 $ 0 Required 2 > Required 1 Required 2 Required 3 Prepare direct labor budgets for September and October. (Round "DL hours required per unit" answers to one decimal place.) Units to produce MCO Leather Direct Labor Budget September October Direct labor hours needed Cost of direct labor 0 0 $ 0 $ 0 < Required 1 Required 3 > (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare factory overhead budgets for September and October. Direct labor hours needed Budgeted variable overhead MCO Leather Factory Overhead Budget September October 0 $ 0 $ 0 0 Budgeted total factory overhead < Required 2 Required 3 >